Investing

Merrill Lynch Has 4 Outstanding Growth Stocks to Buy That Yield More Than 4%

Any way you want to slice it, there is a good chance we remain in a very low-yield environment for years. That’s fine for younger investors, as risky assets like stocks provide long-term growth. It’s a little dicier for older investors that need yield. What we wanted to find was a combination of both: Solid growth ideas that also paid a dividend of at least 4%.

We screened the Merrill Lynch research data base for just those kinds of stocks. While the number is few, we did come across four companies that fit our criteria. They all are rated Buy at Merrill Lynch as well.

Crown Castle International

This is a top cell tower company that offers incredible growth and income possibilities. Crown Castle International Corp. (NYSE: CCI) provides wireless carriers with the infrastructure they need to keep people connected and businesses running. With approximately 40,000 towers and 15,000 small cell nodes supported by approximately 16,000 miles of fiber, Crown Castle is the nation’s largest provider of shared wireless infrastructure with a significant presence in the top 100 U.S. markets.

Numerous Wall Street analysts see the company as the cleanest play in U.S. Mobile infrastructure spending. They cite the company’s low-risk capital return strategy, upside optionality from the smaller cells and what they consider the company’s investment grade balance sheet. The company is structured as a real estate investment trust (REIT), so the dividends may contain return of principal.

Crown Castle shareholders are paid a very nice 4.16% dividend. The Merrill Lynch price target for the stock is $92, and the Thomson/First Call consensus target is set at $95.78. The shares closed most recently at $85.


General Motors

This company is in the automobile sector and its shares look to be very inexpensive at current levels. Despite all the recall troubles and litigation issues, hedge funds and mutual funds are continuing to stick with General Motors Co. (NYSE: GM), as many view the stock as very undervalued. GM trades just below an incredible 5.4 times estimated 2016 earnings. The company, like rival Ford, has benefited from incredible sales in China to boost revenue. GM invested heavily in China decades ago and grabbed a big chunk of what is now the world’s largest auto market.

The company reported very solid fourth-quarter earnings, and with gas prices staying at the lowest levels in years, and GM producing some of the best new models in years, the future for the battered stock looks very good.

GM investors are paid an outstanding 4.93% dividend. Merrill Lynch has a $44 price target for the stock. The consensus price target is much lower at $37.76. Shares closed Thursday at $30.82.

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